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School Finance in Arizona Chuck Essigs AASBO

School Finance in Arizona Chuck Essigs AASBO. Funding of Schools. 1900 - 1950 Very little state assistance Very little state control Ability to fund educational programs based upon wealth of community 1950 – Today Gradual increase in state assistance Gradual increase in state control

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School Finance in Arizona Chuck Essigs AASBO

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  1. School Finance in ArizonaChuck EssigsAASBO

  2. Funding of Schools • 1900 - 1950 • Very little state assistance • Very little state control • Ability to fund educational programs based upon wealth of community • 1950 – Today • Gradual increase in state assistance • Gradual increase in state control • Higher level of equity between school districts

  3. How is the Budget Limit Established?Revenue Control Limit (RCL) 1. Regular ADM of the District a. Preschool Handicapped b. K-8 Students c. 9-12 Students 2. Special Program Add-ons a. Certain Handicapped Students b. Limited English Learners (ELL) c. K-3 Students d. All K students 3. Teacher Experience Index 4. Pupil Transportation Program

  4. 2008-09 Group A ConceptElementary and High School Basic Wt. Group A Wt.Total* Elem. 1.00 0.158 1.158 $3,332 $526 $3,858 1.163 0.105 1.268 H.S. $3,875 $350 $4,225 Regular education - special services: Specific learning disability Emotional disability Mild mental retardation Remedial education Speech/language impairment Homebound Other health impairment Bilingual Preschool/speech lang. delay Gifted Preschool/moderate delay Career Exploration *Includes 1.25% for “Teacher Compensation”

  5. Small School District Funding Weights2008-09 School Year Elementary High School District Small Small Size Isolated SmallIsolated Small Over 600 $3,858 $3,858 $4,225 $4,225 500 400 increases up to 300 200 100 $5,194 $4,560 $5,560 $5,194 *Isolated = no schools within 30 miles of another district or if road conditions and terrain make the driving slow or hazardous; 15 miles

  6. Group B Add-On CategoryWeightAmount K 1.352 $4,505* K-3 0.060 $200 English Learners 0.115 $383 Disabled Students Range from $10,502 to $25,711 Hearing Impaired, Multiple Disabilities, Physically Impaired, Moderate Mental Retardation, Severely Emotionally Disabled and Visual Impairment * at 0.50 = $2,252

  7. Group A Concept Extra funding for Expenditures for every student = special needs students • No financial incentive to put student in • No financial incentive not to end services • Assumes fairly equal distribution of students

  8. Group B Concept Extra funding for Expenditures for specific students = specific students • Identification criteria clear • Parents follow programs

  9. Capital Outlay Revenue Limit (CORL) Note: 64% transferred to M&O Unweighted Student Count times Support Level times CORL growth factor plus High School Texts

  10. Soft Capital Unweighted Student Count times Support Level

  11. 2008-09 CORL and Soft Capital Amounts* • CORL K-8 = $225.76 • CORL 9-12 = $267.94 • CORL textbooks 9-12 = $69.88 • Soft Capital = $225.00 * Same amount since 1998-99 for all areas

  12. Additional AssistanceCharter Schools • Charter Schools / CORL, Soft Capital, Pupil Transportation, School Facilities Board (SFB) • Additional Assistance 2008-09 K – 8 $1,474.16 9 – 12 $1,718.10

  13. District Base Level Add-ons • Teacher compensation • Increase Base Level by 1.25% in SBE approves “performance evaluation system” i.e. certification • Teacher experience index • 2.25% increase to BSL for each year of experience above average • Career ladder • 28 districts get additional 5.5% increase to Base Level

  14. Equalization Concept School District Spending Limit(Equalization Base) minus Local Contribution (QTR) equals State Aid (Equalization Assistance)

  15. “Property Rich” $3,226.88 x 1,000 (weighted ADM) $3,226,880 guaranteed Local property taxes $50,000,000/$100 (district’s taxable value) x $2.9244 QTR equals$1,462,200 (45% of guaranteed amount) State (& county) $3,226,880 minus $1,462,200 equals$1,764,680 (55% of guaranteed amount) “Property Poor” $3,226.88 x 1,000 (weighted ADM) $3,226,880 guaranteed Local property taxes $25,000,000/$100 (district’s taxable value) x $2.9244 QTR equals$731,000 (23% of guaranteed amount) State (& county) $ 3,226,880 minus $731,100 equals$2,496,780 (77% of guaranteed amount) Two Hypothetical Unified Districts

  16. Some District Budget Categories . . . • are paid from local property taxes . . . • . . . causing issues with per-pupil spending and taxation

  17. M&O Overrides • M&O Overrides • 10% of RCL • K-3 Overrides • 5% of K-8 RCL

  18. Other Items Outside Equalization Base, FY 2008 • Desegregation • Adjacent Ways • Excess Utilities • Transportation RCL • Small School Dist. • Dropout Prevention • Registered Warrants

  19. Inflation Funding 1991-92 through 2000-01 • Increases to Base Level • Increase less than inflation for 9 or 10 years • Inflation funding covered one-third of actual inflation

  20. Prop. 301 / Implemented in 2001-02 School year • For first 5 years – 2% • For FY2006-07 and each year thereafter, the Legislature is required to increase the Base Level or other RCL components by the lesser of 2% or the price deflator.

  21. Inflation Impact – Post Prop. 301 (continued) 2001-02 2.2 2.0 <0.2> 2002-03 2.4 2.0 <0.4> 2003-04 1.7 2.0 0.3 2004-05 2.9 2.0 0.9 2005-06 2.2 3.2*** 1.0 2006-07 3.2 4.4**** 1.2 2007-08 3.2 2.98***** <0.22> 2008-09 2.7 2.0 <0.7> * Percentage growth in the GNP price deflator ** Percentage increase in the base level funding factor as provided in A.R.S. 15-901 *** Includes an additional 1.2% for retirement/health insurance **** Includes an additional 2.4% for retirement/health insurance and increase salary for non-administrative personnel ***** Includes 0.98% for increased salary for non-admin. personnel YearActual Rate * Funding Inc.** Variation

  22. Education Week Rankings Adequacy of Funding • Rank 49th out of 50 • Arizona $7,112 vs. national average of $9.963

  23. Education Week Rankings Education Spending Per Pupil FY2006 (Operational) RankStateAmount 1 Vermont $15,139 2 Wyoming $14,128 3 New Jersey $13,238 Avg. U. S. $9,963 48 Nevada $7,213 49 Arizona $7,112 50 Utah $5,964

  24. American Legislative Exchange Council (ALEC) Arizona (2005-06) (Operations) • Expenditure Per Pupil rank next to last • Pupil/Teacher Ratio = 21.3 vs. national average of 15.2 • Pupil/Teacher Ratio rank next to highest (only Utah at 22.1 puts more kids in each class)

  25. Move to National Average • Using ALEC data, Arizona is $2,956 below national average • 46% increase to move to average • Estimated cost is $3 billion • 2% inflation - $100 million • 30 years of extra 2% needed

  26. Also Part of the Spending Per Pupil Discussion / Capital Spending Arizona ranks near the top for: • student growth • capital expenditures per pupil • student/teacher ratio

  27. Other Major Revenue Sources 2008-09 • Classroom Site Fund – Prop. 301 ($470 per student / $390 per weighted count) • Instructional Improvement Fund – Indian Gaming ($40 per student)

  28. School District Governing Board Allocates Funds to Regular, Special and Pupil Transportation Program from Budget Limit Budget Limit Regular Education Special Education Pupil Transportation Special Ed. includes: A. Programs for the handicapped B. Gifted education C. Programs for LEP students D. Remedial education E. Vocational and technical education F. Career education

  29. Budget Limit Increase No GrowthGrowthDecline New students 2% 0 <3%> Plus inc. amt./stu. + 2% + 2% + 2% 4% 2% <1%> Hire new Salary Cuts staff + Increase salary increase

  30. Salary and Benefits 85 – 90% of operating budget

  31. Taxpayer Parents and Community Employees More Services More Services Taxes High Quality Higher Salaries Governing Board Budget

  32. Not enough dollars to meet demands Formula / Legislature • Dollars not being spent effectively Budget Allocation / School District

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